BEIJING—China’s trade weakened in August as high energy prices, inflation, and anti-virus measures weighed on global and Chinese consumer demand, while imports of Russian oil and gas surged.
Exports rose 7 percent over a year ago to $314.9 billion, decelerating from July’s 18 percent expansion, customs data showed Wednesday. Imports contracted by 0.2 percent to $235.5 billion, compared with the previous month’s already weak 2.3 percent growth.
Demand for Chinese exports has softened as Western economies cool and the Federal Reserve and central banks in Europe and Asia raise interest rates to contain surging inflation. At home, repeated closures of Chinese cities to contain virus outbreaks has weighed on consumers’ willingness to spend.
“The slowdown in China’s export sector is adding to headwinds for the Chinese economy,” said Rajiv Biswas of S&P Global Market Intelligence in a report. Lack of import growth highlights “continued weakness of Chinese domestic demand.”
Growth in the country fell to 2.5 percent in the first half of 2022, less than half the Chinese Communist Party’s (CCP) 5.5 percent annual target, after Shanghai and other industrial centers were shut down amid virus outbreaks.
Factories have reopened, but restrictions more recently in areas including the southern business center of Shenzhen weighed on activity. So has a dry summer that left reservoirs in the southwest unable to generate hydropower and disrupted river shipping.
The International Monetary Fund and private sector forecasters have trimmed their already low growth forecasts.
China’s global trade surplus widened by 36.1 percent over a year earlier to $79.4 billion.
Exports to the United States sank 3.8 percent from a year ago to $49.8 billion while imports of American goods declined 7.3 percent to $13 billion. The politically sensitive trade surplus with the United States that helped to spark a tariff war narrowed by 2.4 percent to $36.7 billion.
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U.S. President Joe Biden has left in place the trade tariff imposed by his predecessor, Donald Trump, on Chinese goods. The duties was the Trump administration’s efforts to combat the CCP’s unfair trade practices that cost the U.S. economy billions of dollars. The CCP retaliated by raising its own import duties and told Chinese companies to stop buying American exports.
Envoys from the two sides talk by phone but have yet to announce a date to resume negotiations.
Imports from Russia, mostly oil and gas, surged 59.3 percent to $11.2 billion as China appeared to take advantage of discounts offered by the Kremlin to attract buyers in the face of Western sanctions over its war on Ukraine.
China’s purchases of Russian energy irritate Washington and its allies but don’t violate sanctions on Moscow. Last year, China bought 20 percent of Russian crude exports, according to the International Energy Agency.
Beijing declared ahead of the February invasion that it had a “no limits” friendship with Moscow. It criticizes the sanctions but has avoided helping President Vladimir Putin for fear of losing access to Western markets and the global banking system.
Exports to Russia rose 26.5 percent to $8 billion.
Exports to the 27-nation European Union tumbled 18.4 percent to $51.3 billion, reflecting weak European demand.
Imports of European goods plunged 33.1 percent to $26 billion. China’s trade surplus with Europe widened by 5.4 percent to $25.3 billion.
By Joe McDonald